Socially-acceptable generation rate for small utilities pushed
Wednesday, November 03, 2004
By MYRNA M. VELASCO
The National Power Corporation-Small Power Utilities Group (NPC-SPUG) is set to file before the Energy Regulatory Commission (ERC) for what it deemed as socially-acceptable generation rate (SAGER) for consumers in remote and grid-isolated areas.
"We are contemplating on a socially-acceptable generation rate for small power utilities and we will soon file that with the ERC," said Energy secretary Vincent S. Perez.
It was explained that SAGER takes into consideration the affordability of electricity supply that shall be delivered to consumers; and at the same time, it shall also factor in a reasonable rate of return for investors willing to stake in their capital in these so-called less-viable areas.
Perez said this move is critically important at this point when the government is all set to dispose of the NPC-SPUG assets; and this should serve among the bargaining stance of the privatization committee to potential investors.
It has just announced last week the first chunk of the NPC-SPUG privatization exercise, starting with at least three electric cooperatives in Marinduque, Tablas and Romblon; out of the 14 already identified for initial disposal.
The energy chief noted that electricity demand in these areas has been steadily increasing due to increased economic activities; and primarily because most of these areas are promising tourism destinations.
Under the power development blueprint, NPCSPUG areas are being grouped into "waves" based on the suitability of the areas for supply by new private provider to ensure an orderly and well-managed private sector participation process.
Considered as missionary or unviable areas, NPC-SPUG provides the electricity requirements of these areas.
A recent Circular by the Department of Energy set out new rules and procedures for the inflow of private capital in missionary electrification.
At present, NPC-SPUG operations are funded by the revenues from electricity sales in missionary areas and from the universal charge, a component of the power bill charged to all electricity consumers.
It was further explained that the entry of new players would address the increasing power requirements of growing island provinces in the coming years.
With privatization, the government is hopeful that investors would be able to install new power generating facilities including associated power delivery systems.
A competitive bidding process will be done in the selection of new companies to ensure that prospective players have the financial and technical capability to supply electricity.
In particular, new players are expected to pursue projects that would address the lowest long-term cost of power and services, environmental compatability with the local area and the most advantageous implementation schedule.
Upon entry of a new player, NPC-SPUG would cease operations in the area. NPC-SPUG is then ordered to dispose the particular assets in the area through competitive bidding process or redeploy them to serve other missionary fields.
posted by philpower @ 9:11 AM,
